The Sun Life Group Policy and the USIC Group Policy provide voluntary dependent life insurance benefits to participants for $10,000 per dependent. Under both policies, dependent children are covered until age 19 or until age 25 if he or she is a full time student. During the time in which a participant opts for dependent life insurance benefits, the cost of the dependent life insurance benefit is deducted from that participant’s paycheck. Under the terms of the policies, once a dependent child no longer meets the definition of a Dependent Child, the participant has the option, under a certain period of time, to convert the coverage to an individual life insurance policy.  

The complaint alleges that despite USIC and Sun Life either having record of dependents’ dates of birth or having the right to request dependents’ dates of birth, neither make  an effort to determine whether dependent children still qualify for the definition of Dependent Child under their policies. Instead, USIC and Sun Life continue to accept insurance premiums for children who are no longer eligible to be insured under the policy. Once USIC and Sun Life learn that a child is no longer eligible for coverage, which is when a child dies, the premiums are simply refunded to the participant without interest. As a result, a participant continues to pay for dependent life insurance benefits beyond their child’s age of eligibility, loses their opportunity to obtain alternative individual life insurance coverage once their child is ineligible and, in the event of their child’s death, would be denied a claim for dependent life insurance benefits under USIC’s and Sun Life’s policies.   

The Court has certified the following class: 

All participants in an ERISA-covered plan that provided or offered dependent child life insurance that is or was insured by Sun Life Assurance Company of Canada (“Sun Life”) or Union Security Insurance Company (“USIC”) at any time from and including August 25, 2015 until March 14, 2025 and for which a participant paid premiums (or premiums were paid) for at least one child in such dependent child life insurance coverage and either (i) had no enrolled children who met the definition of dependent child under the policy while such premiums were paid for coverage or (ii) had a claim for dependent child life insurance denied because the child’s age was beyond the oldest allowable age for a dependent child under the applicable policy or based on the child’s age and because the child was not a full-time student; and the beneficiaries of such persons.

Excluded from the Class are (1) any fiduciaries of the Plans with decision-making or administrative authority related to the establishment, administration, funding or interpretation of the Plan, (2) persons not eligible for benefits under Section IV of this Settlement Agreement. Additionally, any person does not meet the requirements of Section (ii) of the Class Definition and will be excluded unless (a) Defendants identify that person as a Class Member With Denied Claim or (b) the claim for dependent child life insurance was denied solely because the child’s age was beyond the oldest allowable age for a dependent child under the applicable policy or a claim denied solely based on the child’s age and because the child was not a full-time student.  

The Complaint was filed on August 25, 2021. Defendants Sun Life and USIC filed their Answer to the Complaint on December 13, 2021.  

The Amended Complaint was filed on January 3, 2022. Defendants Sun Life and USIC filed their Answer to the Amended Complaint on January 18, 2022. Defendant Merakey filed its response to the Amended Complaint on January 24, 2022.

After four mediation sessions with an experienced mediator, the parties agreed on a settlement term sheet on December 14, 2023 with respect to the underlying claims and exclusive of any claims for attorneys’ fees and expenses. A formal settlement agreement was executed on October 9, 2024.

Under the terms of the Settlement, class members will receive most of what they could have received if the litigation had resulted in successful judgment:

          Group 1: For class members whose claims for benefits were previously denied: For class members who had a claim for child dependent life insurance that was denied due to the child’s age, Defendants will pay 100% of the benefits where the child was older than the maximum allowable age under the policy or 50% of the benefits where the child was older than the maximum allowable age under the policy but did not exceed the maximum age for a fulltime student.

          Group 2: For class members who had not previously filed a claim for benefits: For class members whose child has died or will die in the next 10 years but who had not yet filed a claim, Defendants will pay 100% of the benefits allowed under the policy regardless of if the child was beyond the maximum age and under age 40.

          Group 3: Class members who continued to pay premiums when they no longer had eligible dependent children have the option to convert the child dependent life insurance into an individual life insurance policy for each ineligible child.

Under the terms of the Settlement, Defendants agreed to pay $1 million into a separate Fees & Expense Fund, which does not affect or reduce the amount to be paid to the Class.

Plaintiff filed a Motion for Preliminary Approval of Settlement on November 5, 2024. The settlement needs to be approved by the Court, which consists of a three part process: (1) the Court granting preliminary approval of the settlement, (2) formal notice mailed to class members providing class members the ability to comment on the Settlement, and (3) the Court granting final approval of the settlement.

The Court granted Plaintiff’s Motion for Preliminary Approval on November 26, 2024 and held a final approval hearing on March 14, 2025 at 2pm ET at the United States District Court for the Eastern District of Pennsylvania, 10614 U.S. Courthouse, 601 Market Street, Courtroom 10-A, Philadelphia, Pennsylvania 19106.

Final Judgment - April 17, 2025

Order Granting Final Approval - March 20, 2025

Full Notice Packet

Notice of Settlement

Notice to Plan Administrators

Notice of Potential Claim Form

Notice of Interest in Conversion

Settlement Agreement

Order on Preliminary Approval of Settlement - November 26, 2024

Order on Motion for Class Certification - November 26, 2024

Motion for Class Certification - January 27, 2023

Amended Complaint - January 3, 2022

Complaint - August 25, 2021

Instagram Case Summary

What the Sun Life Dependent Class Action Settlement Can Teach Us about the Importance of Enforcing Eligibility Rules, Cottingham & Butler